BELFA - Earnings call 3 2022

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Operator

Good morning, ladies and gentlemen, and welcome to the Bel Fuse Third Quarter 2020 Earnings Call. [Operator Instructions] As a reminder, this call is being recorded.

I'd now like to turn the conference over to Steven Hooser with the Three Part Advisors. Please proceed, sir.

Steven Hooser

Thank you, Claudia, and good morning, everyone. our XXXX joining call. for you third earnings quarter Thank

and and everyone like conference implied number statements regarding risks Before company's future current operating future on I'd or results may are remind These the performance that to statements due factors. of periods. expected expectations. statements we begin, expressed the forward-looking forward-looking differ to a materially this by based other those for these certain call company's for Actual financial periods contains from

information factors that could as the time. with Additional is reports on with Commission, impact included our time report from XX-K and SEC annual Exchange the Form on quarterly potentially and release including and results other about recent subsequent to our our Securities and filings in financial yesterday's discussed most filings press our

may and call press results have during been also included to reconciliation of results discuss our non-GAAP We GAAP results that this in non-GAAP our release.

our available press SEC Our filings IR and on section our are release website. of the

is and on CEO; Financial Chief Now joining of Tuweiq, Farouq call Officer; and President Dan Hutkin, Reporting. the Bernstein, Financial Director Lynn me today

With that, Dan. to call I'll the turn over Dan? now

Daniel Bernstein

I'm for report Bel. Steve, X-year you thank you, the in call pleased all EBITDA highest and us adjusted a our Revenue, history. again all Thank the on today. new and record-breaking for once to joining quarter backlog were

and to way the enhancing our our work business. the EBITDA the we adjusted this by quality global growing mid-XXXX to an margin These profit From line, see in increase and as back do strong need perspective, together team, would of margins top were of look simplify level. you efforts we collective led the results to

addressing target our or continue Across negative each product margins low including SKU, groups, certain we all are margins. specific X to that achieve to of

revenue done and is still given our that agreements. We a material of are not certain it's still resized part yet, being

of end our many the aerospace XXX% last our see quarter. market. we million over commercial robust continue increase of from demand customers to pricing, third were an Sales year's Aside for from $X into quarter,

As wiring XX% new QX X-year our market both for in demand to or products passive million sales production the a premise requirements, kinetic high, of 'XX. continues to and which $X ramp increase aftermarket contributed up hit aircraft over

sales last EV end market million be up continue strong, to XX% third $X.X or quarter. year's from

partners number addition, end distribution a across grew the to growth, has and markets testament resiliency all This our over a over of diversity Group from million same In years. or $X.X generated from built period of last and is revenue Bel business the XX% that year. our coming products, the been

their Lastly, reduction material shortening resulting there's their starting purchase and surcharges, $X.X we're expected of to been passed revenues, third backlog that as in of labor along reduction magnetic long particularly quarter to had and commitments our which us, Certain to is continue with customers raw quarter, as of within The have will last the in million sales, was the shortage. a group. customers. we including our similar length see

another of the proud of momentum. level team continued look same very in closing for and again to quarter I'm with our I XXXX the that forward once our resulted record-breaking effort Bel.

moment to Before Bel. take with turning partners I'd over to very call Lynn, the like long-tenured mine to a X of acknowledge

Director in -- Cheung site Ray X. Asia, retiring Bel's Mr. announced, Manufacturing both be previously in Zhongshan, our Operations Raymond of Cheung, January China Operations As Tso, VP will and of

advisory his also month. consultancy the corporate stepping role and be tax from side, On down Tso next will

customer thought been Bel Raymond also to successfully reliable Asian stable XXXX relationships with Raymond's the joined has and building industry. establishing companies been grown President of Under Vice has since one our many electronic has across in long-term Asia and countries. Bel solid Raymond Bel of be and most in Operations partners and XXXX. Asia business alliances instrumental leadership, in

probably for just We a and colleague good a Raymond friend call the are past to honored as XX years.

Mr. tenured one years. Tso for of associates is over XX Bel's longest

and of sometimes, dependability under his our a as from China benefited challenging over and, in thousands reliability associates manager the circumstances. have We most

As Board with of he's with global has Bel for that been XX a in with acquisitions, member, has regulations, setting confidant and in father ours countless tax up the first, the and structure a a former been me. past today. Tso He has years, then my with tax change been trusted instrumental and us

There and and to their friendship years, over to are families Cheung future and wish for not very service our in express thanks words the endeavors. their them their we enough many this Raymond and best Tso

now like Lynn? to Lynn financial provide to the update. turn I'd further to call over

Lynn Hutkin

Dan. you, Thank

as As prior. Dan across of a of compared with were year-over-year XXXX. third to QX quarter $XXX Overall, our increase increased XX% each quarter growth groups. year product mentioned, XX.X% very the for an strong XX% margin quarter the of to was third sales seen from Gross million,

Solutions up Protection Power were $XX.X XX% group, product from and million, quarter. third year's By last sales

to CUI Power In an also invoicing, which material from raw business, addition group Dan's benefited and posted strong of $X 'XX. increase on from sales or surcharge sales the XX% million EV commentary QX in our

by XXX driven action point of 'XX, mix, product Gross QX this favorable was margin past the largely some pricing impact year in group a the improvement third XX.X% for over for a from FX. shift and benefits favorable basis taken the quarter, from

orders of of Power Our and book-to-bill the ratio the backlog and an quarter from during a of Protection increase XXXX a year-end. of third XX% $XXX Solutions million, X.X had of group XXXX

be XX% in mostly million, to commercial aerospace quarter, rebound continued markets. of market. an Sales third to the group. due resulting end and Turning XX% the premise wiring Military challenged defense sales from continued to in our Connectivity increase of year-over-year $XX.X past quarter, decrease end Solutions year's last this were a

this group XX.X% 'XX, of in in Gross the quarter for quarter of XX.X% up for at third third margin came from the XXXX.

over group our for last this margins it year's in improvement third expectations. seen remains below quarter, we've While target

margins much on be about go still we'll months. activities hearing believe As here, to the improvement such over there coming and such, we is

accommodate a in ramp-up workforce inefficiencies the had be over needed group in Throughout impacted to XXXX, air. majority to the of commercial will been this inefficiencies These time. reduced rebound related by

The a the and X.X ratio orders third book-to-bill backlog of September during XX, December $XXX of of group XXXX at increase million XX% of Connectivity a XX. had quarter from Solutions an of

in up for dollar, versus prior. a Magnetic Gross was sales quarter XXXX. XX.X% to our Solutions volume in benefited the lowered group in sales Lastly, third Margins favorable of the exchange improved labor in year's XXXX versus from third group cost the which significantly favorable our this really a had felt effect of million, $XX.X higher U.S. quarter. also of QX from and year XX% This XX.X% rates this of margin China for last shift Chinese from renminbi September. group FX

$XXX quarter group Our the finished the is on with Magnetic from a Solutions XXXX the chain supply X.X of orders group of quarter third of the worth customers. orders, our had and level. from down during book-to-bill seeing XX% of most management million ratio This year-end XXXX data

million to in seen QX, this not anticipate a what we the to level At near is of level, continue availability. in $XX due component effect waterfall we've consolidated ship there in orders to similar that This primarily will which quarters, did the scheduled prior term. were and were

a Our of SG&A, quarter as third related $XX.X of million XX.X% $XX.X in last sales, rep and up selling, the from general total fringe and increases commissions. to primary or but administrative expenses sales. million were salaries, the down percentage year, were Within benefits

$XX.X balance flow the of December to quarter Turning million, an a with We balance items. cash sheet million from $X.X and ended increase of cash XX.

the from our year-end. by Our We accounts balance. million increase working capital $XX.X increased million saw an XXXX $XX.X receivable in

at compared XX at -- sorry, XX, XXXX. I'm December Our September DSO were XX, XX days XXXX, days December to at

$XX.X year-end. million by increased from Inventories

cash first there capital quarter, of was the it lesser each was quarters X of XXXX. during compared and a While of third continued the investment extent to to working

addition working cash first other where continued program of of capital million capital, and million. of we X flows months made In our $X.X changes $X.X dividend included in for expenditures the items payments XXXX to impacting

and taxes first $X.X payments was the $X.X during million, paid XXXX of for X totaled months income interest Cash million.

I'll the turn for additional expectations. over call Farouq color, Farouq? and now outlook to

Farouq Tuweiq

Lynn. Thanks, Yes.

serve past, and streamlining profit business, to by noted in improving a stakeholders we've As on better way our optimizing footprint do the operational Bel we margins. journey the is our

When ago, I work our to our to successes journey. quarter Bel done. celebrate certainly there can months was reflect XX date, we joined just be results in And third this while step another

we're X of journey as and Phase and the more yet customers' made. alignment done proper our not strategy. to use progress be margin mentioned, to Dan was And better

we our better the positioned Phase better From ahead ways standpoint, we is road are focused optimize operation operationally of to exciting X business. us. continue to see ensure an to for

to initiatives expected yesterday's simplify be a operational earnings to we release, by noted completed a in launched footprint recently of series mid-XXXX. in project our As

of manufacturing X Zhongshan our consolidating in into sites and X Hangzhou, total a ] bringing them buildings be in together County Banyan initially the and magnetic of China site single in centralized China. [ Southwestern will spread We across

the of Of expect costs Restructuring months. third initiatives. balance the and $X.X CapEx over $XX XX of the recognized China XXXX. the expected is million related spend this probably to Incremental quarter, amount, expected recognized $X are the through third was of to million quarter in we approximately million be next

quarter We realize on the China initiative annualized approximately beginning of million of $X the fourth savings cost expect in to XXXX.

of X and to that COVID of location examined we partners, a outside and few. our of in the manufacturing out complexity wages, a of Southwestern the set internationally operational logical lockdown material move availability, China midst raw and on we engineering our the predictability, the segment, long-tenured in most consolidation by As our choice China policy, concluded project, a was talent name options customers labor desires, availability driven this such

its we X geographic our and When location X is magnetics this operations have to site locations is project Vietnam. will existing into new desirable the in Further, buildings. complete, main our partner given slimmed manufacturing proximity down

will of ultimately operations Florida work connectivity in the will and the into continue Florida our house, both Melbourne, Tempe, and engineering of side do. Minnesota. Arizona are the a in Arizona will Europe. facility existing underway now number the transition and actions manufacturing close, site our their high-tech U.S. focus our to on U.S., sites Waseca, In the in On they

These primarily X with $XXX,XXX. incremental quarters, U.S. next cost $XXX,XXX over restructuring actions spend of CapEx to the are expected in of result

in beginning second the initiative approximately We expect savings XXXX. million annualized to on of realize quarter the of cost U.S. $X.X

restructuring plan incremental million. and U.K. in $XXX,XXX we exit to with result These in CapEx Europe, are next U.K. existing quarters, our of $X X spread In actions consolidate spend expected facility approximately U.K. in the into our those to operations of site over cost Chelmsford, Sudbury,

this XXXX. We in cost third the approximately expect of of initiative U.K. beginning on annualized savings to $XXX,XXX realize quarter

being gain our quarter. recognized in the New closed Jersey, announced, one on Jersey in in $X.X of as sale City, we previously Separately, of million third resulting the corporate a buildings

These initiatives us years our are excited for healthier as a work operational of company. the ahead that gets continuation a

growth margin one ahead the more QX of just As versus single-digit high margin XXXX, expect with the in quarter, last to from the top we from expansion year's quarter look line fourth in be levels with fourth to quarter line XXXX, the third had. gross we we

see in as to quarter expect this effect well. more We favorable

backlog decline product is a shift and and the mix margin We know well not beyond. On backlogs position exchange in that in XXXX created the for all equal, favorable us are markets. seeing this higher-margin, a longer-cycle products side, in pickup shift end in lower for will we believe we're

drive momentum our results to very Overall, that with global are the change quarter this and we for happy continues our team. positive

our of to While on with still to Dan. some turn continue that, over be back additional we've the initiatives today, journey. And I'll shared as work with we our done call recent there's you

Daniel Bernstein

possible, up we Farouq. open If questions can now? the call you, Thank for

Operator

from comes O'Neill Research. Hills Litchfield Theodore question first The Instructions] from [Operator

Theodore O'Neill

a on . Congratulations quarter. great

Daniel Bernstein

Thank you.

Theodore O'Neill

Yes.

it of Can the So now. us is on occurred? until that Is some of an consolidation time now hasn't the for the happen? event question to And that right like there idea why operations. happened you give

Daniel Bernstein

no. No,

the fine I just have the done same we looking a comb. at going years, with think substantial consolidation and strategy past over a everything as forward

Farouq Tuweiq

little But call obviously, that. it's last, And the on need to we it, of getting are, -- docket specifically one we been X-plus COVID some X for today. in a as balance years. of assess we of some I lockdown think have policy going a where rough bit it's in With on add time. the to magnetics, this to just world's this the obviously China with been

little bit this took alignment going get time. so and ultimately on, a we in longer but So to wasn't

it, about and go. excited to And we're we're ready

ahead. us, this we feel and that never excited you move we're confident that -- for So design things this was the to time the ideally, right is us. we can time these for but are right Obviously,

Theodore O'Neill

balance expect the accounts much, time? see on sheet, inventories of over And here receivable go stagnate not or if to backlog you Okay. very down and continues sort to do change

Farouq Tuweiq

backlog you let's within X few to and XX worth backlog, and Today, last it know, years. quarters complexities maybe partially that on quarter chain, of all comment, depends the X that in backlog. on have business, happening but of the of kind just times the weeks. the historically, So been as we worth we supply call roughly have to Obviously, a elongated all lead the just things it's have

X So I bit some maybe near not would my the back be our quarters. guess it -- kind of a or will potentially little is maybe come think on little return levelization expectation to term, of below the a bit but

for management it, next things about we some are think we that 'XX. QX some the call scheduled, of as today, So year, we're the late seeing are of where

really from strong. customer's perspective. think fundamental management chain, is we this of of you more a demand remains the that supply So But will, if

On continue think sales the inventory we AR expect grow. to side, our I to

on I raw little to normally wouldn't a it to a be. made backlog has Partially, that. like security materials flight acquiring is think we'd maybe bit where more the gone do it than we it Inventory different.

had we inventory. a ship million my said, expected to Lynn not in of out shipped all as we $XX And that sudden

occur. bit inventory to So figure an really It's especially still. we level and normalization hard will out little of of we're a that in where, environment do think -- with when just

Operator

comes question Co. Jim next Ricchiuti & The from from Needham

Chris Grenga

drivers quarter. expect of the on bit of do about gross guide at have You sustainability the how efforts came next for And talk from mentioned an price And a And margins Could gross more for This consolidation on gross had you improvement? margin the do is about contribution actually that the level? and mix? which margins? -- the to you you Grenga Chris think impact Q Jim. the

Farouq Tuweiq

high address of just that. I'll the level Maybe

alignment we're about of cost initiatives. talked series As structure. focused And cost and that going there's Dan said, optimize the to here on really margins, is the on a be to we side our

expectation there that would in profit our a be to is way So our positive margins. contributory be it would

improvement, signs. as So continued done our expectation our right? is expectation said, and not So early liking yet, Dan is, we're we're the

and then which side cost The from, of of frankly, alignment improvement new come on ensuring there customer kind as products, products mix start. proper we to is going and pursue quite better there's also margin it, we the that of

are then to those X low-margin is in of will path obviously But multi-pronged it by handful expectation And kind But on part Lynn and it, last fundamentally, continue margins we're kind forward profit. quarter the approach. the done were a also perspective, say, we here, the X has been our really things linear. I but FX. here off We offset So here. elaborate be would for a impacted and not would this of of most rarely the change, to kind of momentum. I our But is large. PPV, that's on like which favorably say our gross detractor quarters from margin for net linear is is our

So on give Lynn, you why that? don't color

Lynn Hutkin

Yes.

by So into of I -- kind delving product group. so just it

and margins On improvement as certainly on years. rebounding, in the so that depressed was side, from the has helping the the resulted while that pressure connectivity for market in there. largely Commercial been our Air there up that is increase several workforce a speed, we the the got rebounding it mentioned, us additional margin end And in that business we to

X across the market, end our to across was this distribution strong all product quarter. groups that board, very addition In was

expansion So that aided well. margin as the

quarters in We this over the efforts here have team to there was China And kind related in pricing. manufacturing side, of with group. FX the rightsizing, Power group. Power largely the some was several the of benefit the past On some that do

our higher other the market, end a increasing is then at that to small had be strong business tends the margin. And EV but quarter. a be which And to for steadily factors very year-over-year, continued CUI

main were Power kind the the on of those drivers side. So

majority have manufacturing related is that this also in is FX. that impact a to included in of China. The our magnetics, is that then And favorable most had group business would a Signal the better been profitability a just over kind quarters the of lot work of look renewed there a business, and has taking done the at that and couple focus. business, past of But

margin to And also for the contributing so business. improvement that's that

Chris Grenga

during Great. to are process, Very helpful. that And entail? respect with what that the in minimizing about does China, disruption consolidation, how particularly thinking you And transition?

Farouq Tuweiq

Yes.

an we initial crew. not is already. an and people there up, a we've The set insignificant site So hired already already site, have and to amount we starting already build-out get of have

of our knowledge frankly, from lot pretty The high-level that into goes moving over product there facility, quite a engineering and and, that that's is know-how product.

to challenge ensuring it So the disruption. that that's -- we is without going over move

would careful here. say extra I we're So being

up and our kind work we the we internally, ensure also alignment site. it processes that. have with of We for to various we've set [indiscernible] customers Obviously, new up have as to

how So diligent I'd but -- as we right being obviously, -- get and But now, now Hope tactical sideways. you of and a months these going crew know with more go. best let's we're anything associates. for -- few ready the of this for started be things a a say for we're

And so like chances. we our far,

it opportunity some the equipment the to also lines of future offers your expansion. us on also upgrade some build and to there But some point, for redundancy

we look X given really efficient across to it just spread lay do the and So everything out and a lean opportunity out facility way potentially buildings. at gives an more we're

be under one Now we'll all roof.

will So quite it's be really frankly. multipronged, operational that improvement

us. why exciting for that's really it's So

Daniel Bernstein

in noted But very this that with should be that, familiar to we're it addition area.

the understand have always labor of line XX because content law labor can product in X,XXX years the on every We the -- an move you that world. -- Historically, of we best people to line. the be product labor mostly find the because that throughout you have for this area about working

work experienced at and So think to other we lot the like moving subcontract we point mentioned, Indonesia, do work very understand consideration, looking been Malaysia, this also as time as closely in where very And areas we a Thailand, bet the And we still closely. we're China in They Philippines. have being, very Vietnam we best strong at into hard, a mentioned, again, close I spent of this. we very was people have we our the that that do felt with. area our

Chris Grenga

more the seen any respect I changing if pushouts of the you Great. signs to cancellations backlog, And environment? for may. one have macro With me, or given

Daniel Bernstein

has Our past backlog don't for do visibility We X see see But any of normal again, again. around back the are million going been pretty negative strong, when lead times $XXX come to we to occasionally months. pushouts.

from is aerospace, But think this long never kind also. very still We've perspective experienced we positive with. everybody area us for again, period our a mentioned, the with time. we in seem also. on that's for But well still I every boding eggshells of really from increase as And deal things such walking commercial

Farouq Tuweiq

said the we in think here most Yes. mid near, the end Dan markets And of our term fundamentally, I in think it there. will be demand is, and long

playing So we like we're the end in. markets

saying play so we we little -- where if areas magnetic side, customer's bit playing work. if So we're like will, we're like of management, -- fundamentally through on the still even the within you the we a the go

we're the little in if it fundamentally, So a regardless out that, has nicely backlog. set here, we feel

Operator

Asset question Robert Martin Management. comes from next Martin The ] from [

Unknown Analyst

Welcome the excellent. appreciative. sure nice peer on group shareholders returns both very I'm are even in very margins quarter. and the valuation. profit your That's guys, to sales, improved a Congratulations,

and a next business you to that Now basis, to sense chance as order company over public proceed profit in visibility any as where a establishing the rolling period the is of would up multiyear consider years margin have as can targets a there sort matures? you're some from structuring revenue this of few profitability over

Farouq Tuweiq

Yes.

there. question the for thanks Robert, So

We have we are internal working targets and metrics that towards.

of a -- we craziness quite I out operating of question of now lot to like would ongoing initiatives, the a think that is putting the clarity aligned a of a world where the multitude frankly -- we of short to of in lot Is it there really with we coupled bit come, with pinpointing internally are call it more with more want where providing provide when. and some terms a in guidance, to, In to It little yes. getting And them today, and go. we're ourselves right

of not of matter when matter mind, but it's a our if it's when. So a in

Unknown Analyst

not Okay. quarterly billion $XXX Well, with I would sales the like start run a bid of to far anyway. you're $X from since targets rate million

Daniel Bernstein

That proper tremendous $X goal talking to job -- a on to to sense done have longer. the came to billion. I he's Farouq us was any nice it think It's I since margin doesn't without Bel, really the focus have But say importantly. more a like make to margins,

line we think our with key But margin the important revenue margins. I side little is I know again, important a for of And that's is. really bit we mean, how more really good growth focus is things. want good top that us,

Farouq Tuweiq

right And now, improvement evolved And changed. we're as going Robert, margin And has at you growth. point, and and as the on not kind margins a of obviously, lot course to of set revenue once then we've seeing your out know, sleeping stuff. the that our kind we're there, doing playbook we're right, of

hunting on the applying to we it's different business. a But have just that we're focused We're lens still for that today. potential

being kind your this in We company. share aspirations of where want it. way this bigger to of it time, right do doing we in the we're So a environment,

more. would out have X other if that if we I in a thing to say, quarters, our up offer one us it And lot gained let's go at there example, buy look has for is you will this last cost and EBITDA, certainly, profit the EBITDA,

relatively to get spend. internally Here, we're low able for

still term, we're growth focused here But in be sure. gotten for cheap, will. to you think on yes, more if long the the on we there's So ultimately,

Unknown Analyst

Okay.

you in new high a in further as seems new product it spend having guys product talked introductions. year, very R&D, could the you more to profitability Last business Regarding more there's year now afford and significantly a innovation about though introduction. little to that

to comfortable the How looking? And as and semi-proprietary year getting far some features technology? you trying are power you're from this of as productivity and innovation and maintain business with introductions pricing product is amount the with new

Daniel Bernstein

Again we R&D I to. don't I standpoint, think increasing an have from think, R&D, again,

X I strong think each product department of groups our R&D. have

think I to we NPI. are committed

increase XX% our group NPI almost over by almost to is product the goal X I our next years. think

doing partners We're lot We're working to with We besides a world evolving a looking don't product invent at everything label with the have we realize throughout ourselves. that to private start agreement. we sell.

We have tremendous product distribution channels put that we can through.

that best example The of is EOS.

So out didn't we market. our years. They their power rounded When great we able felt -- fit business. that they a product pick came had that very name that under they our shop us. niche We around. to up EOS they And for wanted sell, selling to supply a about were to our we decided X well, products had were

We feel long-term for a very reasonable price relationship. based on our

sales private are So to increase possible. way grow again, through developing labeling products, we're we our it's doing and as ourselves, -- as committed every much

Unknown Analyst

Okay. And then last one question.

-- up to frees the does any growth acquisition As starts you would areas acquire, team market perhaps balance company reentering if a capital And the which of of have business? the inclined? levels, normal on to working so they starts like reduced, is the this the and cash, expectations sheet, and to company spurt more bit the as and call to fade management

Daniel Bernstein

have We believe signed. acquisitions We the acquisitions. NDAs constantly are do of looked never of Bel's part acquisition forward. at going that a have Today, key growth We've left X we market. we acquisitions

not prejudiced. And we're

give themselves, product those our look can looking at groups of to X best continue where the can in all we think will and the company. we I areas that strengthen areas they benefit

Operator

from next Hendi Funds. Susanto question [Operator from comes Instructions] The Gabelli

Hendi Susanto

results. on And then strong congrats

Daniel Bernstein

Thank you.

Hendi Susanto

price And how much Farouq. been completed? can to for much you how First question is have characterize more Farouq, go? optimization

Farouq Tuweiq

Good question.

Our revenue kind I'd if throw maybe go XX% or, changes. another agree, you a the we Dan, would still to I shot know say got if dark don't I XX% to here, it, But were guess. my XX%, in be uneducated continuously call of just

and not our meaningful it still is do is go reflected But know in it yet we to results.

coming discussions in background, contracts these are happened up. have are that So are happening as the

it's an So price amount not I that say still to optimize. we need would insignificant

Hendi Susanto

the Farouq, Or to like on when is said XX% on you that like sales total And SKU? that based then volumes? is XX%, based

Farouq Tuweiq

but were then probably revenue. would kind as just I'll back of think my -- it XX% if answer I say, I'll to take to or I of XX%, a

Hendi Susanto

And then for yes. a Okay, question Dan.

has Bel think -- reported you sales I Dan, backlog record then performance. So and outstanding -- Fuse so

the about other inventory hand, hearing we think distributors. On at concerns customers, kept at I correction

And in then same -- in I think areas. there's while markets, like concern some not a they broadening growing may like be is the weaknesses about there

for those like So we should compare concerns contrast with and and so how -- Fuse? outlook Bel

Daniel Bernstein

coming our all have on is anything we Based on to come. relationships, lead those but backlog, of the based data times we we cliff the have going the seen we Based make us the customer marketplace, is if but concerns the haven't cliff hear our in panic, based them. or on from a majority today, on and our see don't semiconductor we companies, to

over future. from at we the we and we hear the strong So bullish mentioned past what laggards things positive And company the very on and and which the that military orders very the point, years, this we are only see sales X were again, in people. aerospace, as from

think we So again, bullish that's stage. why I this that are at

Farouq Tuweiq

I'd what about of say said. I indeed. I'll more simply think kind Dan build up it

connectivity there because in group. Our we Power we been the ways our magnetics, will has happened leading to business, And go. get it have way. power has And

our X leading segments been delivered our the call way. have records, despite -- the these of it, So with, is X results,

is early if Dan's stages in bit up. Connector even little to the of waking see of So business point, we I'd a weakness, on our those say X,

there in there. business, then connectivity we know and things kind at And look beyond done to we the of the margin are what then we as as things side, revenue And look very some needs there. growing where be power, like both at on

think things we e-mobility, see to as nice of distribution rail some As our starting well, business.

So back And not that with mind, doing running to always diversity everybody of the contribution. one this that comes hot. comments we're of

work segments, should comfort that think like being all segments, we I hand. focused X is all that X our give So touching done and in we're

Daniel Bernstein

at that, falling in that we're at to look -- our reviewing, if the we're people looking XX%. increase, to And addition XX% you the and hanging most X% within sales are reports industry, our at

think how is we that our and strategy many is focus we right, right. things So we that NPI right, doing are

are I'd based that a haven't this say, reviewing we're getting cocky, in of we cocky, a maybe at confidence that little, had but moment. lot past we the data not the So on

Lynn Hutkin

your I to add, if And Hendi, question backlog. on can just

bit, to -- to important down see, we're starting it's the backlog a particularly of magnetics, While shortening note, we really are it's a of it's in the that to really that seeing. come length the

example, if on books quarters X us, someone X So want worth maybe have the with with on only quarters us. they the books had of to for orders

fourth purchase it's this So that don't canceled that to level they that's out of because out. want have that commitment point at getting quarter open far

of a of more that of it's now overall an demand. not So the backlog the seeing we're indication shortening and right

Hendi Susanto

I market, have into see. you including And networking IT then do any data the and insight center infrastructure?

Daniel Bernstein

have to of that's area difficult our going proper to the have margins from want -- the areas opinion, been very a one forward. that Just be we

to of or a you data ours, years X if look business. out and was ago decided example, drop key of for X Facebook that we So customer centers, at

data the that the a do of we us. we center again, networking, a networking for at. lot do still stable we major a we from so companies, hear in market From lot end exclusive we're deal feel is with So -- standpoint, and very look more customers

they're their hold is the they shipments have the to And bringing make networking that some on most the would on And semiconductors, putting industries, their lost problem on get inventory, semiconductors problem only semiconductors based thought until like can't what get in. in time. companies, The we with that, to they on have they they inventory up be rightsize for the so they can in. the

Hendi Susanto

I see, yes. then more question. And one

of So in into? footprint operational what be assets and would real kind to terms of do you manufacturing, estate location, metrics efficiency, usually look you share able

Farouq Tuweiq

up where to to kind decide a factory? of Metrics for or open consolidate

Hendi Susanto

Yes.

Farouq Tuweiq

Yes.

it's So significant. I too mean, really nothing

Year be bit of in our weaker thing New patterns your in migration know, time. we little Dan kind during China operate, to real and lot come to people long said, very that's in QX And of to rents, change general saw as you wages, generally other a the and critical China very labor Chinese a been is, right, for due home disruption what's we've estate where the the cost COVID. availability, tends a As

So the the hit bonuses about things one facility local nice one a workforce. be new and of on tends of this kind of lot of is metrics, of a those more you to

area onboard we So lot our will -- of we And as people, think in think, also that turnover. be. people live will we a minimize I them, where it to there

So we is to of a for lot going positive think be us. that

that advance situation, to this Vietnam. insignificant in in not also then And corner we have an contract

it potentially other So the up border, open opportunities. getting interesting closer of on there could side the

one So -- out that roof, versus designing the to little spread my -- from sleep thing under more to is perspective on. across and a also facilities be a is facility getting big X definitely overarching is nothing meant modern bit no

of work the lot with still we're to close us. obviously, CNs also, transacting are a customers that And

some like my needs and for same look footage opportunity going things square then of pretty expansion. there obviously things a we'll as what's today and textbook So to is tomorrow, at and do the for

look been that also potential we've upgrades headcounts. at automation at We doing We look here. employee

draw that So for number haven't current slate we've facility, location, because for our years been -- Dan, in years. it blank and that's is really a great us years of a for a we to what, XX something done

has brewing world we So changed little a building. bit, the are and a new brand

about of you things lot a do you the this. think why it's that So would

Hendi Susanto

to may was So I some regard one Bel on China Fuse impact squeeze assume the Yes. with question? sales. the months there policy, in tolerance And last X several COVID then I more

that half puts we we takes we So when should think should first was there say, China lockdown into are account of know let's in months of are first that the year, in about, some we impact so or and how that what X take XXXX? next

Daniel Bernstein

did the happen the was working up lockdown minor labor make days we it can because in past weekend do year, I don't over a the we think after there revenue. lockdown, opened have significant lockdown only lockdown, longer any or up. what If affected the was that a the

from be very at revenue So to hit not we've a been fortunate all standpoint.

the quickly. do If more move in world. come very COVID, down careful, they're in are And react aggressive they forward, country any they someone very watchful. and other they than very going China Now does much with

the Kong All future, can't Hong COVID it predict in a make have we as do protocols put place. to we place but in the all So we possible, remain as clean work to in.

Farouq Tuweiq

last had March. I in we think that one the was

Lynn Hutkin

March, yes.

for locked were down for -- we just days. XX So

Farouq Tuweiq

-- that. X like days like I or had X, days something X

Lynn Hutkin

had one March, QX. in so no In

Operator

Brooks comes Capital. question next by from Brick from Brick The Robert

Robert Brooks

guys excellent Just on you to wanted first congratulate quarter.

Daniel Bernstein

you. Thank

Robert Brooks

for Dan. First question

that margins what You more EBITDA us the are versus now little to business the -- a top you guys what seeing between differences at the call the were mentioned what -- in maybe I was on is the similar color are the give wondering, you guys could then? mid-XXXXs. you of

have a there's over making but the obviously, And you guys product past terms more bit X mix was different of business -- the implemented efficient, in -- that then? strategies there years the the back maybe

Daniel Bernstein

have key I he it, to we to to we have I but on where X the when hate be ago I credit say think board be, successful. -- of to lot a really to Farouq company refocus came give the years of thing give to have

my it was And fault.

line in. be we billion were too we taken driven $X of we position. revenue I have maybe company from And in top business think to took a that point the should

strong, and really on we we to evaluate every to really then business I SKUs that be to to from selling, part margin we we're refocus So how and where fit. had that have of we fit felt and teams, helpful what and didn't substantial a, had where everybody from customers had we with to initially the be we think want go Farouq that the didn't standpoint mostly had

working great red very So on energy. at levels refocus see of can green each to specifically partner division we or spent each was and first, getting look Farouq, in each it orange a deal the our the data or group -- so manager

the delivering lead most on of times focused are long then did customers where that our pricing where are today with pricing. [indiscernible] we And not really become a factor,

amount a that the fair major think customers leeway gave for pricing, been what and fair that paying are give that's change. them, implement we So to we a have where I do our us

Farouq Tuweiq

was think back from is a I'm I the standpoint, if product largely magnetics. me wrong, It mid-XXXXs. correct in

product We one have the concentration group.... on

Lynn Hutkin

sure. Yes,

the manufacturing we largely on in been mid-XXXXs, in the back would about largely So China magnetics, that XX% at focused have heavily networking China, space point.

XX acquisitions, we've the over footprint. past done a series operational diversified So years, our of

kind groups time product were over that born frame. Our of

parts. just So moving of lots

revenue margins, to over turned Dan's the just of Farouq period back been build the since what that's joined, has on we're to to and focus scale, point, focus years a And today. And and margins the the were primary a seeing has for not time. definitely focus

Operator

a is Martin Martin follow-up [ ]. question Robert [ question Management from next ] The Asset from

Unknown Analyst

Dan, quarters X while and to rapidly business have the a a we talked next about ago, the EV sized in upside few seem X years. it's And small the grow nice growing, to it into potential to business. does to

$XX million, progress Since passed, million next the few $XX about insight to that any do revenue and the a million, year business have might years? $XX over more you level into it how has

Daniel Bernstein

that an become million us X do $XX money into I for standpoint. from We in it and a possibly It's we'd that hope So business. we're key million should believe business, think $XXX business. what area acquisition a putting years also

America, a different so engine rep think sell this forth, things. America network many to the were I of North direct we we're manager. and Initially, hired using particular -- person customers. all a global design product, for because using we again, So right for doing the we're and But for a North worldwide unique to

our do growth we company. in areas yes, one So of it's think probably major the

Operator

we Bernstein conference further for Dan time, turn I'd questions. no back this now to At to have like the closing remarks.

Daniel Bernstein

looking as to continue and this to momentum. say. today, us Farouq joining a for is And you the beginning, good this thank day. likes forward we're just Have again, hopefully, Once

Operator

The disconnect you attending may now very concluded. for Thank conference now today's and much lines. presentation, you has your

Bel Fuse (BELFB) 27 Oct 222022 Q3 Earnings call transcript